Trade Gravity Mode: Demonstration from China and Inspiration

On the basis of adopting and revising trade gravity model,the author validates that the primary deciding factors of China's bilateral trade are the economic scale of trade partners,population,space distance,trade policy and so on.Moreover,Beta coefficient test indicates that regional economic cooperation organization is the most important factor which influences China's international trade.It is shown from trade potential analysis that Chinese government should pay more attention to the domestic market,stick to the strategy of expanding interior demand and at the same time regulate trade structure and improve the trade growth means.